Uncertainties in Formulating Monetary Policy Hearing Before the Commerce Cons

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Uncertainties in Formulating Monetary Policy Hearing Before the Commerce Cons
Consumer United States Congress House Committee On Gover
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To assume that a doctor today operates the way he did in the 1950s is an incredible stretch of the imagination.
If we underestimate quality improvement in these major sectors then the Consumer Price Index is consistently overestimating inflation. We do not know whether the inflation rate in the U. S. Is really 78 Basis of Quarterly GDP Estimates 1960 Judgement 12% Partial 36% Basis of Quarterly GDP Estimates 1991 Judgement 16% Src: Martin Fieming, John Jordan, and Kathleen Lang, "The impact of
...Measurement Error In the U. S. National income and Product Accounts, " Unpublished paper 79 3%. If, in fact, productivity growth is as strong in services as it is in manufacturing, the true inflation rate today should be 1. 5%, about half the measured rate. Would the Federal Reserve be as eager to tighten if the Consumer Price Index were rising only 1. 5%?
Fifties Data for the '90s Much of our data collection procedures originated in the 1940s and 1950s. We are still classifying many products according to the standards of a bygone era.


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